Chapter - 1

INTRODUCTION

Today, the explosion of media enables many more companies to sell

their Products and services directly to customer without intermediaries. The
existing media-print and broadcast, catalogs, direct mail and telephone marketing
- have been complemented by Fax machines, e-mail, the internet and on-line
services. Companies are increasingly using all these media to make direct to
existing customer and to identify new prospects. The most recent channels for
direct marketing are electronics channels. The term electronic commerce (e-
commerce) describes wide variety of electronic platforms, such as the sending of
purchase orders to suppliers via electronic data interchange (EDI).; the use of fax
and e-mail to conduct transactions the use of ATMS, EFTPS, and smart cards to
facilitate payment and obtain cash, and the use of the internet and on-line services.
All of these involved doing business in market space” as compared to a physical “
market place”.

Underlying electronic business are two phenomena; digitalization and

connectivity. Digitalization consists of converting text, data, sound and image into
a stream of “bits” that can be dispatched at incredible speed from one location to
another. Connectivity involves building networks and expresses the fact that much
of the worlds business is carried over networks connecting people and companies.
These networks are called intranets where they connect people within a company,
extranets when they connect a company with it suppliers and customers; and the
internet when they connect users to an amazingly larger “information highway”.

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 The most popular purchases over the Internet have thus for been in
computer hardware & software, airline tickets, books & music. There is also
growing e-commerce in food, flowered , wine, clothing and electronic. Business
transactions over the internet are at a much higher volume and over a great variety
of goods and services. There is consideration growth in the amount of Internet
financial transaction (stock trading, home banking, insurance). Forreter Research
Inc. Predicts that e-commerce will grow to $327 billion by the year 2002. Here we
will focus on e-commerce channels, of which there are two types:-

1. Commercial Channels

Various companies have setup on-line information and marketing

services that signed up for the service and pay a monthly fee. The best known on-
line service provider and the Goliath of the on-line services industry is America
on-line with an estimated 14 million subscribers. Microsoft Network (MSN) and
prodigy are trailing for behind AOL with 2.45 million and 1 million subscriber,
respectively. These channels provide information (news, libraries, education,
travel, sports, reference) entertainment (fun and games), shopping dialogue
opportunities (bulletin boards) forums, chat room) and e-mail.

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The Internet:-

The internet is a global web of computer network that has made

instantaneous and decentralized global communication possible. Internet usage has
surged with the recent development of the user-friendly World Wide Web and web
browser software such as Netscape Navigator and Microsoft Internet Explorer.
Users can surf the Internet and experience fully integrated text, graphics images,
and sound. Users can send e-mail, exchange views, shop for products and access
news, recipes, art and business information. The Internet itself is free though
individual users need to pay an Internet service provider to be hooked up to it.

T he electronic communication is showing explosive growth. In 1997

the Internet user population numbered 100 million worldwide, of which 67 million
were in the United States. Internet traffic is doubling every 100 days. There are
more than 1.5 million websites. Mckinsey & company estimates that e-commerce
sales could grow to $ 327 billion by the year 2002. The creation of the
“Information Superhighway” is revolutionizing commerce.

Electronic Business is the general term for buyers and sellers using
electronic means to research, communicate, and potentially transact with one
another. Electronic markets are sponsored websites that:-
(1) Describe the product and services offered by sellers.
(2) Allow buyer to search information.

Identify what they need or want, and place orders using a credit
card. The product is than derived physically (To the customer house of office) or
electronically (Software can be down loaded to a customer’s computer).

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Offline Business or traditional business practices follow the usage of
intermediaries between the seller and the customer. Most producers as not sell
their goods directly to the final users. Between them stands a set of intermediaries
performing a variety of function. These intermediaries constitute a marketing
channel (Also called a trade channel or distribution channel). Some intermediaries
such as wholesalers and retailers – but take titles to and resell the merchandise;
then are called merchants. Others brokers, manufacturers, representatives, sales-
agents, search for customers and many negotiate on the product’s behalf and do
not take title to the goods, they are called agents. Still others-transportation
companies, independent warehouse, banks, advertisement agencies assist in the
distribution process but neither take title to goods nor negotiate purchase or sales;
they are called facilitators.

The traditional practices of the business in now overtake by the

modern practices i.e. Offline business is now been overtaken by online business
i.e. e-business. E Business is changing the shape of competition, the speed of
action and the nature of leadership Managers everywhere are feeling the heat.
There companies are at the e-commence crossroads and there are many ways to go
but which road will lead to success? What are the roadworks that will be forced to
navigate? Which business models management strategies and tactics will make
them successful? What will be the character tics of the next generation of business
application and which vendors will lead in delivering them ? And to whom can
they turn for help. These are some of the important issues that have to be taken up
before the change.

Mainly there are three types of E Commerce transaction i.e. B2B

(Business to Business), B2C (Business to Consumer), C2B (Consumer to
Business). It is becoming crystal clear that with e-commerce, we have entered a
new place, the age of e-business design Competition is not so much product in

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Product but traditional business design versus 3-business design. Who will take
the led and become the leader will depend upon the design which others better
services and value to the customers and soon the time will come when all business
will be a 3-business.

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 ON-LINE MARKETING : CUSTOMER PERSPECTIVE

As a whole, the internet population is younger, more affluent, better

educated and more male then the general population. But as more people find
their way on to the internet, the cyberspace population is becoming more
mainstream and diverse. Younger users are more likely to use the internet for
entertainment and socializing. Yet 45% of users are 40 or older and use the
internet for investment and more serious matters. Internet users in general place
greater value on information and lend to respond negatively to messages aimed
only at selling. They decide what marketing information they will receive about
which products and services and under what conditions in online marketing the
consumer not the marketer, gives permission and controls the interaction.

Internet search engines such as yahoo, Alta-vista, infoseek, give

consumers access to varied information sources making them better informed and
more discerning shoppers buyers have gained the following capabilities in the new
information rich regime.

1. They can get objective information for multiple brands, including

costs.
2. They can initiate request for advertising and information from
manufacturers.
3. They can design the offerings they want.
4. They can use software agents to search for and invite offers from
multiple sellers.

These new buyers capabilities mean that the exchange process in the age of
information has become customer initiated and customers controlled.

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Marketers and their representatives are held at bay till customer invite them
to participate in the exchange. Even of the marketers enter the exchange
process, customer define the rules of engagement and insulate themselves
with the help of agents and intermediates. Customers define what
information they read, what offerings they all interested in, and what prices
they are willing to pay in many ways this customers initiated and customer-
controlled marketing practices.

Consumer how people can use the internet to buy all kinds of
music video CD-ROMS and Audio Books.

• Planet M Online (www.planetmonline.com). This site takes you

through all kinds of music, video, CD-ROMS, and Audio books. It
offers you a collections of more than 5000 products, 100000 tracks
of Indian film music. Indian Classical Music, International popular,
western classical music and children category. Here’s how

• Registration

• Navigation Tips

• Finding Music

• Placing on order

• Payment options

• Privacy Policy

• Delivery

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Registration

Before you start shopping you need to register yourself with

planetmonbline.com and give them information that will allow them to
communicate with you regarding you transaction. Registration is very easy with
planetonline.com you just need to fill up a 5-step registration form. Three of their
section i.e. shopping card, wish list and my planet M are password protected.
When you click on any of these links you will reach a login page. A new can
register here or members can login to their account directly, or else, to reach there
directly or click on register option.

Once you are registered with planetmonline.com then the same

username and the password can be used to login to their other channels such as
contests dating, TV-Guide, E-mail and vice-versa.

Navigation Tips

To make shopping on Planetonline.com easy and convenient for

users, the navigation of the site has been divided into three mechanisms.

• Top Brand

In the homepage/music section the sky blue top band contains links to all the
product sections. These are music, video, CD-ROMs and Audio Books in addition
to these links it also has links for shopping cart, wish list, my planet M, Feedback

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and Help, below the sky blue top brand is the Dark Blue Band that offers you the
search facility.

• Left Navigation Band

It gives you a category wise split of categories, e.g. If you are looking for the
album ‘Aaeena-jagit Singh’ then click on the sub category Ghazals. This will be
located within the Indian Non Film Music of the Music section. You will be
shown all titles (including ours) which fall under Ghazals.

• Right Navigation Band

You can search for any particular album in Indian Classical Music, Indian film
music and western classical music through advanced search facility provided here.
Also you can post a message on the India time message boards.

• Finding Music

Planetonline.com has tried to provide as much convenience to there customer’s as

possible. In this endeavor they have used a very comprehensive search engine to
aid in very comprehensive search engine to aid in locating the information you are
trying to source quickly and efficiently and you can also take advantage of New
release/best sellers/chart toppers sections.

 You know what you are looking form use simple search, located
in the top
band to search by artists, band, album title or track.

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  If you didn’t know the name of the album at all, but do know the
movie name or the music director or the lyricist then key in those in
advanced search of Indian film music and you an find the album of you
choice in the Indian classical music category she have the additional search
field of Raagas. In the western classical music category you can search by
composer, performer, conductors or orchestra or work title.

 If you are not sure of what you want, site offers a variety of
starting point
and features to help you decide. From our homepage browser through our
categories of Indian Film Music. Indian Non Film Music, Indian Classical
Music and Children and the various sub-categories within it.

• Placing an order
Placing an order with planetmonine.com is quick and simple.

 As you browse through the store, you can put the items that you want to
purchase instantly in your shopping cart by clicking on the link “Add to
shopping cart” link to shopping cart is provided with every item that is
displayed on the screen. If you haven’t logged in yet, you will reach the
logic page. A new user can register here or members can login to their
account directly.

 After creating an account, you can view your shopping cart

through the My
planet M Section. To continue shopping click on the continue shopping
button, which takes, you back to the homepage.

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  After you have finished shopping you. Can click on the
‘Shopping cart’
link on viewing your shopping cart, change the quantity of the items you
are buying remove an item from your shopping cart etc. After going
through your order details, click on ‘finish shopping’.

 On the subsequent page, you will be asked to give the shipping

address,
suitable payment option particulars, message, if any by default, the
shopping address that you have mentioned in the registration form will be
displayed here. If you want to change the address then go for the ‘change
address’ option given and type in the new address. Next time you visit the
site you have the option of choosing either of the address without having to
type it again.

The message box can be used in as you seem a gift and want a personalized
note attached. It will be sent with your order to that special someone.
Thereafter you can place your order.

An order confirmation e-mail will be sent this will be followed by a

shipment details e-mail.

While browsing through the store, you will come across some items that
you would wish to buy in the near future. Just click on ‘Add to wish list ad
the item will be placed in your wish list. You can buy it anytime you
please, subject to availability of the title in the future.

• Payment Option

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The various payment options on the site are

 Credit Card Online

Visa and Master card payments are processed through an online payment gateway
system. You need not worry about your credit card information falling into the
wrong hands because your bank will authorize the credit card transaction directly
without any information passing through planetmonline. In approximately 25-30
seconds (depending upon your internet connection) your bank will issue via the
online payment gateway an authorization code and confirmation of transaction.

Planetonline.com uses the latest encryption technology and other methods to

protect your credit card information. You can place your order using Netscape
SSL encryption. (the internet standard for secure transaction) in fact, shopping
online with a credit card at a planetmonline.com is even safe than using a credit
card at a restaurant because she do not retain your credit card information you can
be assured that site offers you the highest standards of security experience is
private safe and secure.

Security remains the primary concern of online consumer Planetmonline.com is a

version certified site and payment by credit card is secure on the site.

• PKN

Planetmonline.com brings you the most secured shopping experience on the net
using PKN (Personal Key Number) technology provide by easy Netcom. Pvt Ltd.
PKN guarantees complete security during online transactions without having to

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part with your credit card details. All that you need is to have the Master/VISA
credit card and an e-mail/ID download the PKN form and take a printout complete
the form and mail it to us. Acknowledge receipt of PKN and get your PKN
activated.

• American Express

Planetmonline.com uses the latest encryption technology and other methods to

protect your credit card information you can place your order using Netscape’s
SSL encryption (the internet standard for secure transaction) you need not worry
about your credit card information falling into the wrong hands because the person
exclusively authorized to do so will only access your credit card information. In
fact, shopping online with a credit card at site is even safer than using a credit card
at a restaurant because they do not retain your credit card information. Your
standards of security currently available on the Net so as to ensure that your
shopping experience is private, safe and secure.

• Cash on Delivery

This payment option will enable you to transact with cash payable at the time of
delivery for a minimum order value of Rs. 200. The locations for delivery are the
same as the other payment options. It is compulsory to provide site your e-mail
address. Phone Number and Time slot that you wish to have your items deliver. It
is imperative that you reconfirm your transactions by clicking on the link provided
in the mail by the planetmonline.com.

Cheque-payable at Delhi/New Delhi

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 If you have chosen this payment option then please print out the order form,
which you receive at the last step of placing an order, with the compare details and
sent it along with the cheque in the name of ‘Time interest Limited’ to :-
Planetmonline

4th Floor, Times House

7, Bahadur Zafar Marg, New Delhi – 110 002

The orders will be shifted within 45 days of clearance of cheques.

Outstation Cheque

If you have chosen this payment option then please printout the order form,
which you receive at the best step of placing an order, with the complete address
& details, send it along with the cheque in the name of ‘Times internet Ltd.’ To
above mentioned address.

Demand Drafty-payable at Delhi/New Delhi

If you have chosen this payment option them please follow the some
process as in case of cheque & send it to above address.

• Privacy Policy

The company is committed to protecting your personal privacy.

Planet online will not give out user’s telephone number or e-mail address except
where needed to deliver a product or service you ordered. We will not give out
user credit card number or any account information unless you authorized it e.g.

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processing a credit cared payment. In other words, site will not rent or sell your
name, address e-mail address, credit cared information or personal information to
any third party without user’s Permission. This information collected primarily to
ensure that site is able to fulfill your requirements and to deliver you a truly
personalized shopping experience.

However, site cooperate fully should a situation arise, where we are required by
law or statuary obligation or legal process to provide information about a
customers.

Site, share non-personal, non-individual statistical or demographic information in

aggregate form, with there marketing partners, advertises or other third parties for
research and advertising purposes. In other words, they does not give out
information that you purchased a specific product, but may tell how many
customers purchased a product.

If you have purchased from the store or subscribed to one of sites newsletter, they
may occasionally update you via e-mail of special new product arrivals, features
or schemes on the two site. They may also contact you if you have participated in
one or more contests.

Shipping Information

• Logistic Partner

The logistic Partner of Planetmonline in M/S Elbee Services Ltd.

(www.elbeenet.com)

• Order Confirmation

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As soon as you place the order you will receive an e-mail confirming your order.
This conformation mail will also give an order No. which will help you in making
any inquires through the feedback section.

• Shipment Details

Through a link on the homepage and my planet M you will be able to tack buyer
order by entering your Airway Bill No.

• Shipping Charges

Shipping charges are Rs. 5 per item. Verification of the shipping address before
placing an order in necessary. An additional shipping charges will be applied if the
company has to re-ship an item because of an address error.

• Delivery Places & Time

Currently the company ship in India to approximately 1200 location. Normal
shipment period is 3 days. The order reaches through Elbee Service Ltd. To some
cities/towns it can take up to 120 hrs from the time of pick up to deliver a
consignment.

• Return Policy
Incase the one need to return the goods due to any unforeseen circumstances send
the company message from the feedback section choosing goods return as the

 In case you have received a defective album nothing to worry,

just return the album and company will replace it, along with the

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 replaced title, they will send the customer a cheque reimbursing the
shipping expense.

 In case customer received a wrong album return the same with

the order number for sites referred. They will replace it with the
right title at an earnest. In case the album ordered is not available
site will arrange the refund. The shipping charges in both the ases
will be reimbursed.

 In case one want to cancel an order – if the order is not shipped

yet the refund can be maid with one of following modes :-

If customer have made the payment through credit card/PKN the same will be
automatically refunded.

b. If the mode of payment is cheque/demand draft and it has not been deposited as
yet, the same can be returned to the customers.

c. If the cheque/demand draft has already has been deposited and honored then
the refund could be arranged for.

Thus we can summaries the advantages of on/line marketing through those three
major benefits, which they provide to potential buyers.

1. Convenience

Customers can order products 24 hours a day wherever they are. They
don’t have to sit in traffic, find a parking space, and work through countless
aisles to find and examine goods.

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2. Information

Customer can find reams of comparative information about companies,

products, competitors, and prices without leaving their office or home.

3. Fewer Hassles

Customers don’t have to face sales people or open themselves up to

persuasion and emotional factors they also don’[t have to wait in line.

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 ON-LINE MARKETING : MARKETERS PERSPECTIVE

Marketers are adding on-line channels to find, reach, communicate and

sell. On Line Marketing has at least five great advantages. First both small and
large firms can afford it second there is no real limit on advertising space, in
contrast to print and broadcast media. Third information access and retrieval are
fast compared to overnight mail and even fax. Fourth the site can be visited by
anyone. Anyone in the world at any time. Fifth shopping can be done privately
and swiftly.

However, on-line marketing is not for every company nor online

marketing product. The internet is useful for products and services where the
shoppers seeks greater ordering convenience (e.g. books and music) or lower cost
(e.g. stock trading or news redoing). The internet is also useful were buyer needs
information, about feature and value difference (e.g. automobiles, or computers).
The internet is less useful for products that must be touched or examined in
advance. But even this has exceptions, who would have thought that people
would order expensive computers from Dell or Gate way without seeing any
trying them in advance, people regularly order flowers and wine online sight
unseen.

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Conducting On-Line Marketing
Marketer can do on-line marketing by creating an electronic pressure on the
internet, placing ads online, participating in forums, newsgroups bulletin boards,
and web communities and using e-mail and web casting.

Electronic Pressure

Thousand of business have established a pressure on the internet. Many

websites offer users a wide variety of services. A company can establish an
electronic pressure on the web in two ways. It can buy space on a commercial
online service or it can open its own website Buying a location on a commercial
service involves renting storage space on the online services computers or
establishing in link from the company’s own computer to the online services
shopping wait, e.g. JC Penney links to American online, Compuserver and
Prodigy. The online services typically design the storefront for which the
company pays the online service on annual fee plus a small percentage of the
company’s online sales.

Alternatively, tens of thousands of companies have created that own

websites, typically added by a professional web design company. These sites take
two basic forms.

1. Corporate web Site

A company offers basic information about its history mission and

philosophy. It might also offer current events, financial performance data and job
opportunities. These sites are set up to answer customer questions by e-mail, build

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closer customer relationships and generate excitement about the company. They
are designed to handle interactive communication initiated by the consumer.
Ironically, s recent study has revealed that the test moving silicon valley firm
which pushed the internet revolution, fall down in providing basic corporate
information. The Snelly Taylor and Associates study of 50 corporate websites at
technology companies including (Cison, Yahoo and Excite) found that many sites
made it hard for customers, investors and prospective employees to contact them
and gather information. Most do better for Job seekers, yet almost half of the
firms surveyed did not allow job seekers to submit applications electronically, and
84 % did not give the date a job was posted. The lesson for marketers pay
attention to the basics, such as providing names, phone, numbers and dates, and
making it easy for customers to purchase products on-line.

2. Marketing Website

This kind of website is designed to bring prospects and customers closer to

a purchase or other marketing outcome. The sight might include a catalog,
shopping trips, and promotional features such as coupons, sales, events or
contests, in order to attract visitors the company promotes its website imprint and
board cast advertising and through banner ads that pop up on other websites.

A key challenge is designing a web site that is attractive on first view and
interesting enough to encourage repeat visits. Early websites were mainly text
based. They have increasingly been replaced by graphically sophisticated
websites that promote text, sound and animation ( for example www.gap.com or
www.1800flowrs.com) to encourage revisits, companies run fresh news and
features stores, contests and special offers. Here are some examples of well-
defined websites.

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Garden (www.garden.com)

This website offers a garden planner that lets visitors create and save own
ideal garden designs, after which it suggest plants and implements they will seed
to realize their design, it also offers online shopping and FedEx delivery.

Business marketing is actually the driving force behind the e-commerce judgment.
At least so large enterprise, including chevron, Ford Motor Company. General
Electronic have invested millions in Web procurement systems to automate
corporate purchasing. The results invoices that used to cast $100 to process now
cost as little as $20 if the companies are buying on the internet, then you can be
sure the companies selling over the internet are rating in the profits. Cisco, Dell,
Ingean Micro, and Intel have multibillion dollar sales on their websites and are
paving the way for a future in which almost all inter company business is
conduced over the internet. The web has also proved to be the perfect medium for
business cyber bazaars, those sites were business buyers and sells transact business
across geographic boundaries. Here’s one example.

 Medical Equipment

In 1996 Cynthia Scehuster launched the medical equipment net to served as a

clearing house for companies, doctors offices and hospitals in the market to
buy and sell used or refurbished medical equipment, because this secondary
market is transaction oriented and geographically scattered, the site opens up
another cost-effective sales chamber. Those who used the site to sell their
warehouse are seeing a significant inverse in profit. For instance, by 1998,
Pyramid Medical Inc in Log Alemedos. California had sold an estimated $1
million of product using medical equipment. Not only most companies make
sure that web sites are designed and informative they must also be certain they

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are now unwittingly stranding surfers – and potential customers-in cyberspace.
Most marketers Plasters the same URL (Website address) on all their
promotional literature. Yet it some one is drawn to the site in search of
specific product information, he usually has to made through items like the
company’s philosophy, its history or the assumes of the chief executive, or in
order to get to the product she seeks, a customers may have to go through so
many pages that she loses interest and exist. This problem has led many
companies to develop ‘micro sites’ small, specialized websites for specific
occasions or products. The big motion picture studios created separate sites for
new films rather than sending people to the stood main web sites. Now other
companies are using micro sites for the following situation, new product
launches, promotional campaigns, contests recruiting, crisis communication,
specific product information for those who lick on a banner ad, and media
relations companies should consider developing a micro site for any situation
in which specific, detailed information needs to be made available quickly &
easily. The marketers are benefited through online services in this manner.

o Quick advertisements to market conditions

Companies can quickly add products to their offering and change prices
and desriptions.

o Lower Cost
Online marketers avoid the expense of maintaining a store and the costs
of rent, insurance and utilities. They can produce digital catalogs. For
much less than the cost of printing and mailing paper catalogs.

o Relationship Building

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 Online marketers can dialogue with consumers and lean from them.
Marketers can download useful reports or a free demo of their software
or a free sample of their newsletter.

o Audience Sizing
Marketers can lean now many people visited their online site and how
many stopped at particulars places on the site. The information can help
improve offers and ads.
PRESENT SCENARIO OF ONLINE MARKETING IN INDIA

E-Business (B2C) which was touted as hot opportunity till recently has
not been able to achieve the required profits. Low internet penetration and poor
access quality are being blamed for this. Recovery of the costs of operation has
become very difficult for the e-tailors due to messy economics. Effective supply
chain management, apart from increase in net penetration improves B2C profits.
The other factors which determine the profitability of the B2C operation are,
average order size, gross margins and marketing cost. To make its presence fest
and maintain a proper base it is essential that other viable alternatives have to by
adopted by B2C sites/Companies.

Unless the internet user base in India reached the 25 million mark, all
companies are going to be in dire straits.

Last year around 20 million people worldwide spent $33 billion stopping
crime and yet, not a single B2C company could figure out a way to be profitable.
This year sales will double worldwide but that doesn’t seem to cheer anyone. The
combination of weak financial structure mounting competitive pressures and
investor flight will drive most web retailers out of business by 2001. Warned a
forester research study on the B2C industry early this year.

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 That’s big departure form the days (actually just six months back) when set
up a website-tie up with manufacturers and courier company, advertise lavishly
and you were done. No real estate costs, no hassles of inventories. In furtively the
business of B2C looked compelling.

So why has B2C Business suddenly become a direly word?

Indian has B2C sites blame low internet penetration and poor access
quality. Once that improves (and that should happen in the next 2-3 years) things
will be fine, they say. If that’s the case, why are investor’s overseas deserting
B2C sites in droves? Ask e-tailors for their initial experiences and symptoms of
the malaise surface.

In April 2000 Jaid.com a Delhi based B2C site, created a sensation by

booking orders of Rs. 1.5 crores on its site its founder Kumud Goel had an
ambitious plan to set up 300 Jaldi Kiosks inside consumer durable outlets. This
would have allowed them to capture walk in customers in the buy mode without
spending too much on marketing. One year has passed without a single Kiosk in
Place Sanjay Trehan, CEO of Jaldi.com today says that they have scaled down
their Kosh plan by 50% as it is too expensive.

Fabmart.com a Banglore based B2C site, has focused on a complete

stopping experience by offering both variety and depth of merchandise in books
and music attractive price, online customer support, easy payment options it had it
at but did the magic work ? Customers still weren’t happy. They wanted
deliveries free Format had to settle for a nominal Rs. 5 on every order.

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 Rediff.com’s head of e-commerce, Balachandren Unni is a man who breaks
into laughter at the sliest opportunity, but the moment he gets on B2C the happy
demeanor vanishes on every sale of an audio cassette worth Rs. 50. I lose Rs. 32,
he leant. To put this in perspective, if all the 25 million people that his boss Ajit
Balakrishan hopes will shop online bought just three cassettes each, Rediff entire
Nasdaq raised $55 million cash kitty would be wiped out overmight. Mind you
it’s not a ridiculous as it sounds.

Here’s the nub as more people shop online B2C will lose more money.

Three elements determine the profitability of a B2C operation. Average

order size gross margins and marketing cost. On each parameter, the odds are
stacked against B2C in India. According to one by zero estimates, last year, the
average transaction size was a partly Rs. 272. Then, consider gross margins in
‘Internet appropriate’ categories – books and music. In India they are for lower
than in the US-14-3% as compared to 60% in the US. Currently the two (order
size multiplied by margins) hardly cover marketing costs.

Now, to recover the cost of operation (essentially customer acquisition and

transaction cost) becomes tough. Every time an B2C fulfills an order, he incurs a
huge variable cost, between 30% and 100% to deliver goods home. Customer
acquisition also costs a lot Rediff, India’s cost popular website, spent a hefty Rs.
250 to acquire each customers.

Based on this data, and taking into account the most optimistic projections
for next year, calculations show that for every Rs. 100 sales and B2C makes, he
will lose Rs. 50 and as the volume of transaction rise, so will his losses.

26
 B2C are beginning to realize that conventional business which aggregated
customer order one roof still makes for better economic sense. After all, it was the
customers who incurred the costs of delivering the gods. IN contrast, ensuring
delivery to customers at infinite locations changes the cost of doing business
complete. In the US, marketing costs including the cost of fulfillment as a
percentage of sales is a killing 119%. That’s unlikely to change even as on-line
sales in the JS race ahead from $33 million last year to an estimated $61 billion ext
year.

The same problem looms large over B2C in India. No one, not even those
with physicals infrastructure of warehouses and stores, and a whole lot of retailing
know how, have the answers, say Ajoy Krishnamurti, CEO of Shoppershop.com
the online extension of the successful departmental store, ‘you have a future out a
way to make profit on every transaction, however small it may be. He is still
groping for one.

Pure plays, on the other hand, have to start from scratch it might be possible
to do business through tie-ups (with manufactures, courier companies) when you
have maximum of 500 orders as a day. But it won’t work if you have 5,000
orders, say Kishore Biyani managing director of Rs. 1.25 crore retail chains,
Pantaloon fashions.

Biyani is testing the waters by fulfilling orders for others. And he is

already in he red. “I turn my inventory (at that retail outlet) once a month. But it
takes three months in the case of web site, “he say” he stocks separately for online
orders, to ensure consistent deliveries. Even Amazon.com had to invest in
warehouses.

27
 As volumes climb, B2C will have to manage their supply chain better,
something even the biggest e-tailor in the world. Amazon.com is yet to figure out.
As its business grew from $84.4 million the first quarter of 1998 to $593.8 million
in the first quarter of 2000, its inventory turns went down from 8.5 to 2.9.

It’s Just a Matter But is it too slow The sting in the Due to Messy
of Time ……….. ………………….. Tail…………….. Economics………

With 25 Only 51% of The average High variable

million users, Net users have order size was costs offer no
e-tailing in ever shopped a poor Rs. 2.72 real economics
India will online as in 1999. of scale.
become against 84% in
profitable the US

Expected user 84 million US Gross margins As sales rise,

base by 2003 shoppers for hot transaction
50-70 million. bought $33 categories – costs scale up,
billion worth of music and not down.
staff off the books only 15-
Net. 30%.

Expected B2C Yet not a Most optimistic No solution in

revues by 2003 single one of profit estimates sight globally
: $110 million. them made any for 200 : on to reduce costs
money. every Rs. 100 of e-fulfilment.
sales loss is Rs.
50
28
 Conclusion : Conclusion : Conclusion : Conclusion :
More easy, Too many So as more Unless e-tailers
more shoppers players eyeing shoppers go find alternative
and therefore the tiny $4 online, e-tailers model, profits
profit at last. million B2C will blood will be elusive.
pie. more

OFF LINE MARKETING

Off Line marketing could be described as the traditional marketing i.e.

marketing that does not involve the direct interaction of the company with the
consumer via computers.

Off-Line distribution Channels

The business up to this date was off line. As there is no intermediates in the
on-line business between when we talk of B2C (Business to Consumer) but the in
the off line marketing i.e. between manufacturer & consumer stands a set of
intermediates performing a variety of functions. These intermediates constitute a
marketing channel (also called trade channel or distribution channel) some
intermediaries – such as wholesaler and retailer – buy, take title to, and resell the
merchandise they are called merchants. Still others- transportation companies,
independent warehouse, and banks advertising agencies – assist in the distribution
process but neither takes title of goods nor negotiates purchases of sales, they are
called facilators.

29
Marketing channels are set of interdependent organization involved in the
process of making a product or service available for use or consumption.

Channels Functions and Flows

A marketing channel performs the works of moving goods from producers

to consumers. It overcomes the time, place and possession gaps that separate
goods and services from those who need or want them members of the marketing
channel perform a number of key functions.

 They gather information about potential and current customers, companies

and other actors end forces in the marketing environment.

 They develop and disseminate pervasive communication to stimulate

purchasing.

 Then search agreement on price on other terms so that transfer of

ownership or possession can be affected.

 They place orders with manufactures.

 They acquire the funds to finance inventories at different levels in the

marketing channels.

 They assume risks connected with carrying out channels work.

 They provide for buyer’s payment of their bills through banks and others
financial institutions.

30
  They oversee actual transfer of ownership from one organization or person
to another.

Some functions (Physical title, promotion) constitute a forward flow of activity

from the company to the customer, other function (or daring and payment)
constitutes a backward flow from customers to the company. Still others
(information, negotiation finance, and risk taking) occur in both directions. Five
flows are illustrated in figure for the marketing of forkift tracks. If these flows
were superimposed in one diagram, the tremendous complexity of even simple
marketing channels would be apparent. A manufacturer selling a physical product
and services might require three channels a sale channels a delivery channels, and
a service channel. Thus Del computers use the telephone and the internet as sales
channels, express mail services as the delivery channel, and local repair people as
the service channels.

The question is not whether various channel function need to be performed

they must be but rather who is to perform they must be but rather who is to
perform them. All channels function has three things in common. They issue up
scare resources they can often be performed better through specialization and they
can be extent among channels members. To the extent that when the manufactures
shifts some functions to intermediates, the produces costs and prices are lower, but
the intermediary must add a charge to cover its work. If the intermediates are
more efficient than the manufacturer the prices to consumer should be lower.

If consumer performs some functions themselves they should enjoy lower

prices.

Marketing functions then are more basic than the institutions that perform
them at any given time. Changes in channel institutions largely reflect the

31
discovery of more efficient ways to combine or separate the economic functions
that provide assortments of goods to target customers.

1. Physical Flow

Suppliers Transporter Manufacture Transporter Dealers Customer

Warehouses r Warehouse

2. Title Flow

Suppliers Manufacturer Dealers Customers

3. Payment Flow

Suppliers Banks Manufacture Banks Dealers Banks Customer

r

4. Information Flow
Transpo
rter
Transporters Transporter Banks
Warehouses Warehouses Custo
Suppliers banks Manufactur Banks Dealers mer
er

32
5. Promotion Flow

Advertising
Suppliers Advertising Manufacture Dealers Customer
Agency
Agency r

Channel Levels

The Produce and the Final customers are part of every channel. We will
use the number of intermediary levels to designate the length of channels. The
figure B illustrates several consumer good marketing channels of different lengths.

 A Zero Level Channel/also called direct-marketing channel) consists of a

manufacturer selling directly to the final consumer. The major examples
are door-to-door, sales, home parties, mail order, telemarketing, TV selling
internet. Avon sales representations sell consumers door to door.
Tuppenware representative sell kitchen goods through home parties some
exercise equipment manufacturers sell through TV commercial or hour long
‘infomercials” and single sell sewing machines through its own stores.

 A one channel contains one selling intermediary such as retailers. A two

level channels contains two intermediaries. In the meat packing industry,
wholesalers sell to jobbers, who sell to small retailer. Longer marketing
channels can be found. In Japan, Food distribution may involves as many
as six levels. From the producers point of view obtaining information

33
 about end users and exercising control becomes more difficult as the
number of channel levels increase.

Figure (c) shows channels commonly used in industrial marketing. Industrial

goods manufacturers can use its sales force to sell directly to industrial customers.
Or it can sell to industrial distribution, who sell to the industrial customer. Or is
own sales branches directly to industrial customers, or indirectly to industrial
customers through industrial distributor. Zero one two level marketing channels
are quite common in industrial marketing channels.

Service Sector Channels

The concept of marketing channels is not limited to the distribution of

physical goods. Producers or services and ideas also face the problem of making
their outlet available and accessible to target populations school develop
‘educational dissemination system’ and hospitals develops ‘health delivery
system’. These institutions must figure out agencies and locations for reaching a
population spread out over an area.

As now, Internet technology, advances Services industries such as banking

insurance travel and stock buying and selling will take place through new
channels.

34
(B) Consumer Marketing Channels

O-Level 1-Level 2-Leveel 3-Level

Manufactur Manufactur Manufactur Manufactur

Wholesaler
Wholesaler

Jobber
Retailers Retailer
Retailer

Consumer Consumer Consumer Customer

(c) Industrial Marketing Channels

O-Level 1-Level 2-Leveel 3-Level

Manufacture Manufacture Manufacture Manufacture

Manufacture’s Manufacture
representative Sales branch

35
Industrial
Distribution
Industrial Industrial Industrial Industrial
Customer Customer Customer Customer

COMPARATIVE STUDY OF ON-LINE DISTRIBUTION

CHANNEL VS. OFF-LINE DISTRIBUTION CHANNELS

The Internet is the new trend today, with 50 million people connected in only
five years, the internet has become the fastest accepted communication medium
ever. It took the telephone 7 years, radio 40 years, and television 15 years to reach
that milestone. The internet is no longer just a data net work,. It’s a sale and
distribution channels and it’s facilitated e-commerce the ability to do business
over the web. E-Commerce is enabling the integration of information industries
content, storage, networks, business application and customer’s devices that have
been isolated until recently. This integration is leading to industry convergence.
The welding of consumer electronic, television, publishing, telecommunication
and computers for the purpose of facilitating new forms of value, the internet
groundswell is starting to affect every facet of our lives personal and business.

E-commerce is slowly affecting the distribution channels through which

consumers and business have traditionally bought and sold goods & service. The
online channel provides sellers with the ability to reach a global audience and

36
operate and greater economics of scale, while providing consumers with a broad
selection and unparallel convenience. As a result, a proving nomiee of consumer
conduct business on the web, such as buying good and service trading securities,
paying bills, and purchasing airline tickets.

The online channel is said to be the o-level channel in the consumer-

marketing channel and the offline channel could be 0- level, 1-level, 2-level or 3-
level.

On Line Off Line

Marketing Channels Marketing Channel

Manufacturer Manufacturer

Wholesaler

Jobber

Retailer

Consumer Consumer

37
 Moreover the online marketing is different from the offline marketing a
way as online marketing comes under the one-to-one marketing or direct
marketing but the offline marketing could take any way may be direct, I-Level, 2-
level or 3-level marketing i.e. we can say that as the mass marketing. The major
difference between the mass marketing and one-to-one marketing are as such :-

Mass Marketing One-to-One Marketing

or or
Off Line Marketing On Line Marketing

Average Customer Individual Customer

Customer Anonymity Customer Profile
Standard Product Customer Zed Market Offering
Mass Production Individualized Message
Mass Distribution Individualized Incentives
Mass Promotion Two way messages
One-way message Two way messaged
Economies of Sale Economics of scope
Share of Market Share of Customer
Al Customer Profitable customers
Customers Attractive Customer retention

One of the major benefit of the on-line shopping is the customized

production or availability of the product according to buyer choice & taste, which
is not there in the traditional shopping. Suppose one wants to buy he pair of sports

38
shoes, what procedure will the buyer follow in the purchase of shoes will be
described separately in the online as well as the offline channels.

Purchasing in the On-Line or e-shopping

To buy the shoes on-line the buyer needs the internet connection on the
computer, he well login or visit any shopping site e.g. www.buyeverything.com,
www.hometrade.com, www.rediff.com, www.fabmart.com etc. Now he will
open the page where the men’s shoes. Select the size of the shoes and could make
the choice among the shoes available on that site. If you are buying on-line, one
gets the extra benefits of customized purchasing i.e. the buyer can design its own
shoes give the colors to the shoes and then can check the price of a pair. If
satisfied with the price & design could order them. Here the customer gets various
benefits i.e. he can design & give colors to the shoes, is not pressurized by the
salesman to by the pair i.e. influence is not there etc.

Purchasing off-line or the store shopping

To buy the shoes off line on from the store, buyer simply goes to the store
and selects the available shoes there of his number the choice is restricted by the
availability of the designs in the store, is influenced by the skilful salesman, the
price charged by he store is too high as compare to the price charged by the on-
line sellers because they save lot of expenses others spent a channel
intermediaries, on running such a big store and inventory costs.

Thus we can conclude from this example that buying on-line is for easy &
convenient as compare though the off-line, but we can’t say that all the products
could be bought on-line the goods which require off-line i.e. Jewellary etc. but the
other goods like books, music are usually purchased on-line. Similarly certain

39
services like the service of Doctor could not be bought on-line but the services like
reservation of on-line tickets, banking, stocks trading could be done on-lie. We
can say that every goods & service are not meant that every goods & service we
have to rely on office channels.

CHAPTER 2

REVIEW OF LITERATURE

The topic of on-line marketing is relatively new for the country like India.
This chapter deals with the studies, books and articles, which have already been
within about this topic.

Being on overlooked topic not much empirical study has been undertaken
on this topic, yet some articles have been appearing in magazines like Business
words, Business Today, Advertising & Marketing Newspaper like The Times of
India. Tribune, The Economics Times, Indian Management, effective executive
etc.

The relevant literature has been revised under the following sub-headings :-

1. E-Commerce

40
 2. Marketing
3. E-Commerce

Arden (2000) in his book has elaborated the core skills of information technology,
communication in the IT, the concept & Usage of E-mails, Internet, Windows, and
World Processing etc.

Bajaj (1999) has covered the two topics, information Technology and Business
and Electronic Commerce. The relationship between IT and Business is discussed
in information Technology and Business while Electronic Commerce covers
glimpses of the worldwide developments that have made Electronic Commerce,
what it is today.

Bareja (2000) book is highly informative to all the students of management, media
persons & general Public alike as it introduce & explains the concept of
information Technology. Network communication and the future of Networking.

Capital Market (2001) the article e-commerce cubed write –off spinach has clearly
shown the E-commerce share in the total commerce with special reference to
Infosys technologies.

Capital Market (2001), the article on Net trading says that with e-trading sites
mushrooming aplenty it is a buyer market for investors and however rock-bottom
brokerages is no substitute. For quality & seemlessness of service. The articles
reveal that Internet trading only occupies 1% of offline trading today.

Dudeja (2001) explained the nature and scope of Information, E-commerce and its
new dimensions and challenges and opportunities, one of the keys to business
development.

41
Dudeja (2000) This book covers the topics like Information Technology for the
next millennium information Technology, one of the key to success in the IT,
impact of globalization on information technology etc.

Dominic (2000) in his articles has explained what role advertisement plays in the
present scenario of information technology.

Ghosh (1991) The present compilation includes papers and articles by respective
authorities and experts and provides both students and scholars a valuable insight
into the role, technique and implementation of information systems for and within
the modern corporate enterprise.

Kaul (2000) in his articles has explained the concept of e-tailing, he has also
explained the factors which determined the profitability of the e tailing, like
average order size, gross margins and marketing costs.

Kotier (2000) This book by the Kotler has very finely explained the concept of
electronics business, the advantage/disadvantages of conducting on-line marketing
and the promise, challenge of on-line marketing.

Dr. Kalakota (2001) revealed that why are some companies successful at e-
commerce while other founder, what are business that are solving customer’s
problems doing differently & how are successful companies moving from
traditional to the new breed of integrated e-business architectures ?

42
Krishnan (2000) in his articles has said that bigger opportunity for India may not
be in dolcoms or Business-to-Business (B2B) or Business to Consumer (B2C) but
in the other services, the support services to the international and internet and IT
enabled services.

Jawadekar (1998) books objective is to bring home a systematic knowledge of the

management information technology so that it can be appreciated and understood
for application in business and industry. This explains in brief the principles of
management, which is the basis for conducting any business.

Ramen (2000) articles reveals that the websites are facing the threats of security
i.e. operating online is the real threat, the countries like China & US are imposing
allegations that they are hacking into each other’s websites.

Sampath (2000) has visualized the Indian IT Industry and Dotcoms, critical
success factors, hype and reality of the e-commerce ventures.

Subramanyam (2000) has explained the concept of mass customization, author in

its articles says, we have been trained to view mass production and customized
production as opposing methods. The articles gives a view of what it means to the
various people involved with the industry and how they perceive it.

Sah (1999) book covers the development of commerce and communications

systems in India and abroad. New Frontiers of IT have been described in one
chapter, information theory has been included so that readers will have better
understanding about signal detection and processing in presence of noise San’s
book is helpful generating innovative ideas in the field of IT.

43
Sadagopan (2000) articles says technology is growing by leaps and bounds. Even
before an average Indian could fly comprehend e-commerce the concept of E-
Commerce is all set to penetrate the market. Most of the technological
advancements are beyond the reach of a common man and his daily use. May be
e-commerce would change the situation for the better.

Schneider (2001) book electronic commerce introduces reader to both the theory
and practice of doing business over the Internet and commerce. The book also
explains how project planning and management technology can help make online
business.

Sharma (2000) articles reveals that the growth rate of subscribers to the Internet
connection will grow to the tune of 10 million in the year 2001. The Internet
service providers are offering new & innovative schemes to raise the subscribers
base.

2. Marketing

Kotler (2000) this book has explained how the marketing channels could be
manage and addresses the following questions from the view point of
manufacturers: What work is performed by marketing channels, what decisions
do companies face in designing, managing, evaluating and modifying their
channels, what trends are taking place in channels dynamics and how can channel
conflict be managed.

Roy (2000) in his article has explained the distribution channels, with the special
emphasis on the wholesale industry. The role of intermediaries is very widely
taken up in these articles.

44
Stanton (1994) in his book has explained the various channels of distribution, the
concepts of retailing, wholesaling and physical distribution.

Basic (1997) has explained the channels management, physical

distribution management etc.

Chapter 3

RESEARCH METHODOLOGY

Research Methodology means the procedure adopted for conducting systematic

and planned approach to carry out research project for the purpose of achieving
the objective. The following steps are followed white conducting the study.

Specifying Research Objective

Research objective should be clearly defined, if the objectives are not clear before
starting the study is likely to be misdirected and to pursue vague or obscure goals.
Here the research objectives are to know the effectiveness of online marketing vs.
offline marketing.

Objective of the Study

45
 1. To compare the effectiveness of online distribution channels vs.
Offline distribution channels.

2. To know the consumers perception regarding on-line shopping.

3. To know the marketers perception regarding the online channels.

Research Design

The concept of online marketing is relatively new to our perspective so an

effort is mode to study online marketing as broader concept i.e. both from the
point of view of consumers and marketers.

Data Collection

Primary Data :

Two questionnaires were designed, one questionnaire for the consumer in

tune with the objective of the study and other from the marketers also for the
objective mentioned earlier.

The sample of consumer respondents was 100, which includes people from
different fields like Students, Doctors, Lecturers, Businessmen, Layers and other
Servicemen. The sample extent was the city of Gurdaspur.

46
 The other questionnaire was prepared as to know the other objective of the
study i.e. what is the perception of marketers regarding on-line channels. The
questionnaires were sent to marketers via e-mail. The sample size was 25 incase
of markers, the small size of questionnaire was due to very few on-line marketers
in India.

The questionnaire was designed to be open ended with just factors to be

covered ranking so that the factors which the marketers ranked could be compared
with that of the consumers. The question covered the whole concepts of on-line
marketing.

Secondary Data

This data was taken from the various websites like www.plantemonie.com ,
www.amazon.com, www.ecommercenews.com and from various literatures,
books, journals & magazines.

Statistical Techniques/Scales used for the Study

1. Weighted Average technique.

The weighted average scores were calculated as suitable were the

respondents were asked, to rate different features under study.

These were measured to an five point sale, eight were assigned to the
response from +2 to –2 and then weighted average was calculated.

47
 On the basis of the frequency of rating of each factor, weighted average
score were computed as below.

1 5
Weighted average score (w) = -------- ΣWf
Σfw W-1
Or
--- 1 +2
(w) = ---- ΣWfw
Σfw W=2

Where W is the weight assigned, fw is no of respondents who where assigned the

weight w and Σfw is the total no of responses.

Percentage Method

Percentage method was applied in nearly all the tables formula.

Responses for a category x 100

% = --------------------------------------
Total no. of response

In all the tasks percentage are given in the parenthesis along with

2. Likert Scale

Likert scale involves a list of statements related to the attitude in question. Instead
of checking only those statements with which they agree however, the respondents
are asked to indicated the degree of agreement or disagreement with each

48
statement each degree is given score is computed by summing the individual
score.

Respondents were asked to mark their responses on line five different rating
namely.

1. Agree completely 2
2. Agree somewhat 1
3. Don’t know 0
4. Disagree somewhat -1
5. Disagree completely 2

Limitations of the Study

 Although utmost care has been taken to get accurate results,

yet because of the risk of ambiguities and misinterpretations on the
part of the respondents, some elements of inaccuracy could have
crept in.

 Be cause of the small sample size, the sample is not truly

representative of the universe.

 Some of the marketers were reluctant in disclosing their

strategies hence the marketer’s respondents could also be non-
exhaustive.

 The study is conduced on only Gurdaspur and hence its

validity way suffers as a whole.

49
  Some of the consumers so taken could be no exhaustive;
hence the overall picture of particular occupation class might be
incomplete.

Chapter 4

ANALYSIS & FINDINGS OF DATA – 1 (CONSUMERS)

Q1 Do you know about online or e3-shopping ?

Category No of Respondents %Age

Yes 56 56
No 44 44

44
56 Yes
No
50
56% respondents who know about the online marketing. 50% respondents have
visited any e-shopping site again we can find that consumer know about the
concept but have not tired to visit the site due to many reasons.

Q2 Have you ever visited any e-shopping site ?

Category No of Respondents %age

Yes 28 50
No 28 50

50 50 Yes
No

51
About 50% respondents are aware of the online marketing the figure is not to high,
due to ignorance of people about the benefit and working of online marketing.

Q3. If, Yes which site

Out of 28 respondents who have visited the e-shopping site, the sites visited by
them in number are :
Sites No. of Respondents who visited this
Site
Rediff.com 9
Gidemart.com 5
Amazon.com 4
Planetmonline.com 5
Beautyarcade.com 2
Coobazar.com 1
Lgenbuy.com 7
Asanskyshop.com 4
Uphar.com 1
10 9
9
8
7 7 Rediff.com
6 5 5 Gidemart.com
5 Amazon.com
4 4 Panetronine.com
3 Beautyarcade.com
2 2
Coobazar.com
1 1 1
0 52 Lgezbuyc.om
1 Asiarskyshop.com
Uphar.com
Of the 50% respondents who have visited the e-shopping site maximum have
viewed, rediff.com, Gidemart.com, Lgeebuy.com & Planetmonine.com.
Q4. Have you ever purchase any product on this site ?

Category No. of Respondents %age

Yes 2 7.14
No 26 92.85

7.14

Yes
No

92.85

53
Just one respondent in the 100 respondents have ever purchased the product on the
online this shows that these sites are not able to attract customers to buy on-line
this is due to he poor payment options.

Q5. Prince range of product you purchase or he intended purchase like to make.

Category Respondents %age

Less than Rs. 500 18 64.29
Between Rs. 500 to Rs. 8 28.57
1000
More than Rs. 1000 2 7.14

7.14
Less than Rs.
500

Between Rs.
28.57 500 to Rs.1000

64.29 More than Rs.

500

54
 Out of 28 respondents who ever visited the e-shopping site. ( respondents
says that they have or intend to purchase goods Rs. worth 500 on the net, 4
respondents have given the range of Rs. 500 to Rs. 1000 and just one respondents
said that he has or intend to purchase goods worth more than Rs. 1000 on the net.

6. what was the purpose of visting sites ?

Category No of Respondent %age

Shopping 80 80

Entertainment 100 100

Research 60 60

General Knowledge 40 40

Thus, we can say that the visitors visit site in this preference i.e. first genral
knowledge, secondary entertainment, Thirdly Research purpose & fourthly for
shopping.

Q7. why did you prefer on line shopping over off line shopping?

55
Category No of Respondent Rank

Convenience 60 2

Economical 80 1

Wider Choice 40 3

Time saving 30 4

Customized Products 20 5

According to the respondents they show online in this preference or benefits first is wider
choice, secondary economical, thirdly it is Time saving fourthly it is convenient & lastly
the customized products are available.

Q8. Which of the below product you will usually like to buy online ?

Category No of Respondents
Books 6
CO’s & VCD’s 11
Electronic Equipments 1
Video Games 10
Jewelery 5
Fruits & Vegetables 3
Flowers 4
Cards 5
Grocery 12
Toys 12
5 Books
14 11 CDs & VCDs
12 10
10 Electronic equipments
8 Video Games
5 6 5 5 5 Jewelery
4 4 Fruits & Vegetables
2 3
Flowers
0 1
Cards
56
Grocery
Toys
Most of the respondents says that they will buy cards & music on the e-shops.

Q9. Check you agreement when the following statements-shopping will be a success
in India ?

The answer to this question is to measured on a 5 point Scale.

2 1 0 -1 -2

Strongly Agree Don’t Disagree Strongly

Agree Know Disagree

No. of Respondents Combined Weighted Average Weighted

28 7 25

The average weighted scope comes out to be 25. It means that the respondents don’t
know whether the e-shopping will be a success in India or not.

57
 ANALYSIS & FINDINGS OF DATA – 2 ( MARKETERS )
Q1 According to you what are the benefit of online shopping?.
Category Strongly Agree Disagree total Mean
agree score
Reduces sales force 50 30 20 230 2.3

Reduces or cut short dealer 40 35 25 215 2.15

network

Better customer service 30 50 10 200 2.0

Helps dealer for effective 20 40 40 180 1.8

selling

Larger accessibility customers 30 40 30 200 2.0

Quick adjustment to market 10 50 40 170 1.7

condition

According to marketer the online marketing helps in better customers service, secondary
they say that it helps to reduce sales force, cut short dealership network, helps dealers for

58
effective selling then the site could just quickly to market conditions, and lastly that
larger accessibility to consumers is there.

Q2 Which of the following do you think are hurdles in the success of online
marketing rank them?.

Category No of Respondents %age

Lack of accessibility 20 20

Internet ignorance 50 50

Credit card & payment 30 30

mode

Marketers have ranked the hurdles or roadblocks in the success of on-line marketing in
this manner, first they say lack of accessibility to computers is the major hindrance,
secondly Internet ignorance among population & thirdly payment option also causes
roadblocks.

Q3. What do you think will be the growth rate of on-line business (B2C) in industry ?

Category %Age
Less than 50% 50
50 to 100% 50
More than 100% Nil

59
Regarding this question the 50% respondents says the growth rate will be less then 50%
and 50% says it will be between 50 to 100%

50 50 Less than 50%

50 to 100%

Q4. Check your agreement with the following statement

(brand plays an important role in online selling)?

The answer to this question is to be measured in 5 Pt. Scale

2 1 0 -1 -2

Agree Agree Don’t Disagree Strongly

Completely Somewhat Know Somewhat Completely

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Combined Weighted score Average weighted score
15 1/5

The average weighted score comes out to be 1.5, which means that respondents range
falls between agree completely & agree somewhat with this statements that brand plays
an important role in online selling.

Q5. How is business environment is measured on the six point scale ?

2 1 0 -1 -2 -3

Excellent Very Good Fair Not so Poor

Good Good

The average weighted score comes out to be –1.5 which means that respondents
feels that business environment in India falls between far and not so good for B2C.

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 Chapter 5

CONCLUSIONS & RECOMMENDATIONS

The internet revolution is have to stay. The medium is dynamic interactive

and global. Though it originated for use by defense and academic institutions to

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share information, it is now integrating the people of the world into a true global
village.

The recent Nassoom Survey on e-commerce in India presents a mixed view

of e-commerce in India. It talks of Rs. 3,500 crore of e-commerce revenue in
2000-2001 (that is expected to grow to Rs. 13,000 crore in the next 4 years. It also
talks of poor acceptance of e-commerce in India particularly in the business
consumer segment (B2C).

In fact B2C e-commerce is protected to be just 10% of the overall e-

commerce scene. Even globally, the B2B segment of e-commerce is much larger
than B2C. the Nassoom study shows the acceptance of B2C commerce is rather
low. The study goes further to conclude that unless internet penetration and PC
penetration improve dramatically and internet band width issue is resolved
quickly. The much-hyped IT revolution in India may not take up.

Beside the major advantages available to consumer on-line like

convenience information & fewer hassles & compare to traditional shopping the
success of B2C in India could booked due to low internet penetration poor access
quality once that improves & that should happens next 2-3 years/things will be
fine.

Recommendation

1. The Internet Penetration should be increased & internet base should at

least touch the level of 25 million.

2. The internet access quality & the internet bandwidth problem should be
resolves as easily as possible.

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3. The offline sellers should make the future plans to offers there products
& services online

4. The online sites should be started with the sound financial structure due
to the mounting competitive pressures.

5. The concept of the online selling should be highly advertised on the

other media’s i.e. broadcasting & print media.

BIBLIOGRAPHY

o Arden Trevor (2000), Information Technology, second Edition, Pitman

Publishing, Nee Delhi

o Bareja Arun (2000) introduction to information Technology, Kalpaz

Publications, New Delhi.

64
 o Bajaj, K Kamiesh, Debjani Nag (1999) E-Commerce The Cutting edge of
Business, Tata Mc-Graw Hill Publishing Co. Ltd. Delhi

o Capital Market (2001) E-Commerce casued Write-offs Pitch, Journal

Capital market: Jan 22, Feb 4, 2001, 19-20.

o Ghosn Asit K Prem Kumar (1991) Management information and

Communication Systems, Anmol Publications Pvt. Ltd Delhi

o Jawadeekar ws (1998) Managements information System, Tata MC. Graw

Hill, New Delhi

o Kotier Philip (1999) Marketing Management PP 489-493, 663-669,

Princtice-Hall India Private Ltd, New Delhi.

o Refer to sites, www.planetmoninec.om, www.amazon.com and

www.ecommercetimes.com.

APPENDICES

QUESTIONNAIRE

I am Parminder Singh, a student of MBA IVth Sem. I am carrying out a project on

“A Comparative Analysis of the Effectiveness of On-Line Marketing vs. Off-Line

65
Marketing”. I shall be grateful if you could spare a few minutes from your busy
schedule to answer the following questions. The information provided by you will
be used only for academic purpose.

Q1. Do you know about On-Line or e-shopping ?

Yes ( ) No ( )

Q2. Have you ever visited any e-shopping site ?

Yes ( ) No ( )

Q3. If Yes, which site

a. Rediff.com ( )
b. Glidemart.com ( )
c. Amazan.com ( )
d. Plantmonline.com ( )
e. Beauty Arc ade.com ( )
f. Coolbazar.com ( )
g. Lgezbuy.com ( )
h. Asianskyshop.com ( )
i. Uphar.com ( )
j. Any other ……………………………………………..

Q4. Have you ever purchased any product on this site ?

Yes ( ) No ( )

Q5. Price range of Product you purchased or the intended purchase like to
make?
Less than Rs. 500 ( )
Between Rs. 500 to Rs. 1000 ( )

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 More than Rs. 1000 ( )

Q6. Rank according to your choice why you visit these sites ?
a. Shopping ( )
b. Entertainment ( )
c. Research ( )
d. General Knowledge ( )

Q7. Rank according to your preference, why you like to shop On-Line ?
a. convenience ( )
b. Economical ( )
c. Wider choice ( )
d. Time saving ( )
e. Customized Products ( )

Q8. Which of the below Products you will usually like to buy On-Line ?
a. Books ( )
b. CD’s & VCD’s ( )
c. Automobiles ( )
d. Electronic Equipments ( )
e. Video Games ( )
f. Jewellery ( )

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 g. Fruits & Vegetables ( )
h. Flowers ( )
i. Cards ( )
j. Grocery ( )
k. Toys ( )

Q9. Check your agreement with the following statement :

(e-shopping will be a success in India)
Agree Agree Don’t Disagree Disagree
Completely Somewhat Know Somewhat Completely
( ) ( ) ( ) ( ) ( )

Personal Information

Name …………………………………………..
Age …………………………………………..
Occupation …………………………………………..
Sex …………………………………………..

QUESTIONNAIRE

Dear Sir/Madam

I am the student of MBA, IVth Sem. (PTU, Jalandhar ) carrying on my

project on the Comparative Study of the Effectiveness of an On-line Marketing vs.
Off-line Marketing for the completion of this project. I have certain queries from

68
your company. Please respond to these queries, the information provided by you
will be used only for academic purpose.

Q1. Rank the following options according to your views on On-Line

Marketing?
a. Reduces sales force ( )
b. Reduces or cut short dealership Networks ( )
c. Better customer service ( )
d. Helps dealer for effective selling ( )
e. Larger accessibility to customer ( )
f. Quick adjustment to market conditions ( )

Q2. Which of the following do you think are Hurdles in the success of On-Line
Marketing ( Rank them accordingly)?
a. Lack of accessibility to computer. ( )
b. Internet Ignorance ( )
c. Credit cards and payment mode ( )

Q3. What do you think will be the growth rate of the On-Line Business (B2C)
in Industry ?
a. Less than 50% …………………………………………..
b. 50 to 75% …………………………………………..
c. 75 to 100% …………………………………………..
d. More than 100% …………………………………………..

Q4. Check your agreement with the following statement.

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 (Brand plays an important role in On-Line selling)?

a. Agree completely ( )
b. Agree somewhat ( )
c. Don’t know ( )
d. disagree somewhat ( )
e. Disagree completely ( )

Q5. How is the Business Environment in India for E-Commerce/specially

B2C ?

a. Excellent ( )
b. Very good ( )
c. Good ( )
d. Fair ( )
e. Not so good ( )
f. Poor ( )
g. don’t know ( )

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